All insurers on the panel of brokers, the AA, have pledged that all their customers will not lose their no-claim discount or excess following a crash involving an identified uninsured driver regardless of the cost of damage or personal injury compensation to customers.

The announcement comes at a time when crashes involving uninsured drivers are costing the insurance industry around £380 million per year. According to the Motor Insurers' Bureau (MIB), around 1 out of every 25 drivers on Britain's roads has no insurance.

These uninsured drivers are 10 times more likely to have been convicted of drink driving, and are five times more likely to have been involved in road collisions, to fail to comply with other road traffic requirements and to be engaged in other criminal activity.

While pointing out that it is a 'no-claim' not a 'no-blame' discount, Simon Douglas, director of AA Insurance, said: "It seems unfair that the innocent party should end up paying the penalty of a lost no-claim discount, which could be much greater than the penalty suffered by the uninsured driver, until such time as compensation is met through the MIB when a lost no-claim discount would be normally be restored."

"With the chances of being hit by an uninsured driver in Britain are still higher than almost anywhere else in Europe, the likelihood of a successful recovery of damages from an uninsured driver is extremely low."